Washington Watch

Carter L. Alleman, J.D.

GOP Convenes for Issues Conference, Considers PPACA Repeal/Replace

The House and Senate GOP held their annual issues conference in Philadelphia last week. While lawmakers debated several policy issues, including overhaul of the tax code and the formation of a plan for infrastructure, members’ focus was on the creation of a roadmap for repealing and replacing the Patient Protection and Affordable Care Act (PPACA). Speaker of the House Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) opened the conference with a discussion of the party’s plan for President Trump’s first 200 days in office. Speaker Ryan said that Republicans aim to repeal and replace portions of the 2010 health care law before the August recess. He expects a markup of a reconciliation package to occur in the next several weeks, with a final package being brought to the House floor by late February or early March. The package will repeal the law and include elements of a replacement plan. Lawmakers said that Sen. McConnell appeared to agree with Speaker Ryan’s timeline. The fiscal year (FY) 2017 budget resolution set an initial deadline of January 27 for two committees in the House and two committees in the Senate to send reconciliation legislation that would repeal the PPACA to their respective budget committees. Vice Chairman of the House Budget Committee Todd Rokita (R-Ind.) said that he does not expect to hear from the Ways and Means Committee and Energy and Commerce Committee until mid-February. At the retreat, Republicans discussed plans to use the FY 2018 budget reconciliation process to accomplish tax reform before August of this year.

Walden Proposes to Retain Protections for Pre-Existing Conditions

Rep. Greg Walden (R-Ore.) announced plans to introduce a bill that would ensure health care coverage for patients with pre-existing conditions. Rep. Walden is chairman of the Energy and Commerce Committee, a key health care panel in the House and the first committee to consider specific legislation related to replacement of the 2010 health care law.

Many Republicans are supportive of providing for coverage of pre-existing conditions for those who maintain continuous coverage. The Patient Protection and Affordable Care Act (PPACA) protects all people with a pre-existing condition, regardless of whether they have been previously uninsured or have allowed their coverage to lapse. Chairman Walden’s measure will be considered during an Energy and Commerce Committee hearing. During the hearing, the committee will also examine a handful of other bills that could be included as a part of the series of Republican’s step-by-step PPACA replacement plan. One bill would change the law’s age rating, allowing insurers to charge older people no more than five times as much as younger people, up from the current ratio of three times as much. Another measure would shorten the grace period for people who fail to pay their premiums on time before they are kicked off their insurance plan. Chairman Walden has said that one possibility for moving PPACA replacement pieces is through must-pass items on the 2017 agenda, including reauthorization of the Children’s Health Insurance Program (CHIP) and the expiring Food and Drug Administration (FDA) user fee agreements.

Finance Committee Questions Price

Rep. Tom Price (R-Ga.) completed his second confirmation hearing, this time before the Senate Finance Committee, last week. Democrats once again questioned him about the ethics of his trading of medical stocks. Eight of the 11 Democrats on the Senate Health, Education, Labor, and Pensions (HELP) Committee penned a letter last week to the Securities and Exchange Commission (SEC) calling on them to investigate the nominee’s stock trades. Rep. Price continued to deny any wrongdoing. He was praised by Republican Committee members for his experience as both a legislator and a medical provider. Both sides were eager to learn more about the President’s Affordable Care Act (ACA) replacement plan. President Trump has said he is working on the plan with Rep. Price and would unveil it following Price’s confirmation. Rep. Price did not provide any details of what the Trump Administration’s health care plan would look like, but instead reiterated that it would ensure access to affordable coverage. Democrats also questioned Rep. Price about his past proposals to restructure the Medicare and Medicaid programs. He spoke in favor of giving states more flexibility to administer their Medicaid programs, and said he is in favor of an eight-year extension of the Children’s Health Insurance Program (CHIP). But on the issue of Medicare reform he stressed that his role as Secretary of the U.S. Department of Health and Human Services (HHS) would be very different than his job as a legislator. The President campaigned on a promise not to cut spending for Social Security, Medicare or Medicaid. The Senate Finance Committee is scheduled to vote on Price’s confirmation this week.

Senators Outline PPACA Replacement Plans

Senator Bill Cassidy (R-La.) and Senator Susan Collins (R-Maine) introduced the Patient Freedom Act (S. 191) which would keep many of the 2010 health care law’s taxes in place, and give states the choice of whether they want to keep the ACA insurance market in operation, complete with the current law’s subsidies, mandates, and protections for people with pre- existing conditions. States that do not choose to keep the ACA framework could opt into an alternative plan with many of the same consumer protections but fewer regulations. This plan would likely be cheaper, but less comprehensive. It would provide an age-based, uniform tax credit linked to a health savings account (HSA), which could be used to purchase basic health insurance coverage. Sen. Cassidy acknowledged that the tax credit would not cover every dollar up to the high deductible that the state catastrophic insurance plan would entail, but would instead allow low-income people to begin accessing health services. Every eligible American would be auto-enrolled. States that have not expanded Medicaid would still have the option to do so and receive the federal funding associated with expansion. The bill’s sponsors are hopeful that this
compromise will both lower premiums and help to garner support from Senate Democrats.

Senator Rand Paul (R-Ky.) also introduced his own ACA replacement plan last week – the Obamacare Replacement Act. Sen. Paul has been a strong proponent of quick and simultaneous repeal and replace. His bill includes a tax credit of up to $5,000 per person for an HSA to pay for medical care, as well as a tax deduction for people buying health insurance on their own. He would repeal the individual mandate and eliminate requirements for minimal essential benefits that health plans must cover. The bill includes protections for people with pre-existing conditions only if they maintain continuous coverage, and would allow insurers to sell plans across state lines.

CMS Alerts Providers to Software Errors

Centers for Medicare & Medicaid Services (CMS) released notice that new moderate sedation codes that were to take effect January 1 were incorrectly bundled into several surgical procedure codes in the agency’s payment software. The correspondence also indicates that the incorrect edits do not allow bypass with National Correct Coding Initiative (NCCI)-associated modifiers.

This announcement is of concern to surgeons because, as of January 1, physicians who perform moderate sedation in conjunction with a procedure would have been required to report new moderate sedation Current Procedural Terminology (CPT) codes (99151–99153) in addition to the procedure code. The surgical codes affected by this error include: dialysis circuit (36901–36909); transluminal balloon angioplasty (37246–37249); transoral esophagogastric fundoplasty (43210); and anorectal exam under anesthesia (45990).

CMS has indicated that it will correct these errors in the April 1 version of the software. CMS has stated that physicians who perform moderate sedation and the affected procedure codes may want to consider delaying submission of claims until the new version of the software is implemented. Alternatively, if a physician submits a claim and one of the moderate sedation codes in the range 99151–99153 is denied, the denial may be appealed on or after April 1.

CMS Releases Final Rule on Episode Payment Models

The Centers for Medicare & Medicaid Services (CMS) recently released the Advancing Care Coordination through Episode Payment Models (EPMs) final rule. The rule establishes three new Medicare EPMs for acute myocardial infarction (AMI), coronary artery bypass graft (CABG), and surgical hip/femur fracture treatment (SHFFT) procedures provided in designated geographic areas. The rule also includes provisions to finalize the cardiac Rehabilitation (CR) Incentive Payment program and integrate bundled payment programs into the Quality Payment Program (QPP).

Under the final rule, acute care hospitals that are paid under the Inpatient Prospective Payment System and are located in 98 CMS-designated metropolitan statistical areas (MSAs) will be required to participate in retrospective EPMs for Medicare fee-for-service beneficiaries receiving care during AMI and CABG episodes. The agency will implement the SHFFT model in 67 MSAs where the Comprehensive Care for Joint Replacement program already is in place. An AMI, CABG, or SHFFT model episode will begin with an inpatient admission and end 90 days after discharge. The episode of care will include the inpatient stay and related care covered under Medicare Parts A and B, including hospital care, post-acute care, and physician services, within 90 days of discharge. CMS will continue to pay participating hospitals, providers, and suppliers according to the current Medicare fee-for-service rates.

The AMI EPM, CABG EPM, and CR Incentive Payment program will be tested for five performance years—July 1, 2017, through December 31, 2021. CMS estimates that 1,120 acute care hospitals will participate in the AMI and CABG models, and 860 hospitals will participate in the SHFFT model.

CMS Releases Final Standardized Medicare Outpatient Observation Notice

The Centers for Medicare & Medicaid Services (CMS) recently released the final version of the Medicare Outpatient Observation Notice (MOON)—a standardized form that hospitals must provide to Medicare beneficiaries who are being admitted as outpatients for observation and not as inpatients. The notice, required under the Notice of Observation Treatment and Implication for Care Eligibility Act of 2015, was included in CMS’ 2017 Inpatient Prospective Payment System final rule released in August 2016.

Under the rule, by March 8, hospitals must provide the MOON both verbally and in writing to Medicare beneficiaries who receive outpatient observation services in a hospital for longer than 24 hours. The notice must be delivered to patients within 36 hours of initiating observation services. The MOON is intended to give Medicare beneficiaries advance warning about the implications that their admission status may have on Medicare coverage and cost sharing. If a beneficiary is not admitted to a hospital as an inpatient for at least three days, Medicare will deny Part A payment for stays at post-acute care facilities. Because hospitals provide observation care on an outpatient basis, beneficiaries under observation status may be subject to higher copayments than patients admitted for inpatient services.

In addition to warning Medicare beneficiaries about the three-day minimum inpatient stay requirement for Part A reimbursement, the MOON also informs beneficiaries about CMS’ two-midnight rule. Under the two-midnight rule, which CMS implemented in 2013, inpatient status is generally not considered appropriate for hospital stays lasting less than two midnights unless a physician specifically orders inpatient status. A physician may order inpatient status for any hospital stay.

2017 Medicare Payment Penalties in Effect as of January 1

The Centers for Medicare & Medicaid Services (CMS) released a fact sheet in late December 2016 regarding penalties that are being imposed in 2017 through the Electronic Health Record Incentive Program, also known as meaningful use. Surgeons and other eligible professionals (EPs) who did not meet meaningful use reporting requirements in 2015 are facing a 3 percent Medicare payment penalty in 2017. According to CMS, approximately 171,000 EPs will experience the negative adjustment.

To avoid a penalty in 2018, surgeons may attest to 2016 meaningful use through February 28, 2017. More information about attestation is available through the CMS Registration and Attestation System.